China Fabless: VeriSilicon touts shift to design lite

Editor’s note: Over the next several months, EE Times will profile China’s emerging fabless chip companies, examining their roots, business models and future prospects. Our series serves as background for the EE Times China Fabless Summit, which will convene in Spring 2013 in Silicon Valley. Our profile of VeriSilicon is the first in the series.

SHANGHAI – If you think chip companies are popping up everywhere in China, producing a flood of me-too products based on me-too business models, well, think again. VeriSilicon doesn’t fit the stereotype and defies many preconceived notions about Chinese technology companies.

Headed by Wayne Dai, one of the best connected executives in China and Silicon Valley, VeriSilicon is pitching a “design lite” strategy to potential global partners. Just as the wafer-foundry business model freed many IC companies from manufacturing internally designed chips using their own fabs, Dai promotes a “design foundry” business model. The model aims to free chip vendors from designing all elements of a customer’s SoC from scratch.

[Get ready for the
China Fabless Summit 2013, our Spring forum where Chinese startups will showcase their plans for the future of the electronics industry.]

A new breed of fabless, designless chip companies may not sit well with traditional vendors, but the design lite model may nevertheless be just what the doctor ordered for an industry in transition.

In essence, VeriSilicon offers an antidote to the costly custom consumer SoC business. The nature of the high risk, low margin custom SoC business has brought companies like Renesas Electronics to its knees. Renesas has little choice but to leave the audio visual/multimedia sector of the SoC business. Noting the tremendous pressure from competitors in Taiwan and Korea, VeriSilicon’s Dai said: “It’s time for Japan to work with the Chinese.”

While its design foundry approach mirrors eSilicon and OpenSilicon, VeriSilicon is counting on an army of talented, young Chinese engineers to flesh out the model. In a recent interview, Dai claimed that VeriSilicon has already become “the most geographically diversified design foundry.”

Based both in the U.S. and China, VeriSilicon employs a total of 380 people, 250 of them working in a spacious, sun-filled Shanghai office.

Born in Shanghai, Dai immigrated with his family to California. His siblings include sister Weili Dai, who co-founded Marvell Technology, and brother Wei-Jin Dai, president and CEO of Vivante Corp., a designer of GPU technology for the mobile device and home entertainment markets.

it's common sense that close relatives should not work in the same dept etc. If they do it's legitimate for people to doubt their credentials.
maybe only someone naive like Junko will believe everything from their mouths.

ok, to be fair Weili is somewhere between HTC's cher wang and melinda Gates.
about exactly how much a co-founder she is will remain a mystery... for us.
her husband knows .. everything, but I bet he won't mind if she lies or exaggerates somewhere.
to prove her skill , she better head up a business on her own and show a clean picture to other ppl. but she might never do it since there is tons of excuses...

Junko, much of what VeriSilicon is offering is also done by many Indian design services companies... but with one major difference -foundry liaisons where VeriSilicon has a clear advantage of being in China. This would not have figured prominently if the Indian government was not dilly-dallying about tax breaks for semi fab investments (that has been going on for five years now!)... but that is another story! Perhaps Peter Clarke can chime in?
MP Divakar

Junko, ditto! It seems like @sprite0022 has an axe to grind! Perhaps one should remind here that IEEE doesn't associate with hoaxes!:
http://www.eetimes.com/electronics-news/4395301/Lofgren-hails-Silicon-Valley-patent-office
Marvell as a hitech company is quite an accomplishment in the Silicon Valley. There are mixed reviews about work environment in the company. But its accomplishments would not have been possible without motivated employees contributing!
MP Divakar

Regarding the photo of the break room, I agree that it looks good on picture. But I highly suspect its utilization. The difference between a break room in the Silicon Valley and that of VeriSilicon is that VeriSilicon's break room is empty.
Also if you look at the clock on the wall, it is showing a -2 hour time difference between Shanghai and Taipei, and a +1 hour time difference between Shanghai and Tokyo. It is totally wrong. If you have been to the area, it is common sense that Taipei and Shanghai are in the same time zone while Tokyo is one hour ahead. Not that this matters but cannot help to notice this fail.. LOL

The story mostly details the husband contribution(which seems major and quite interesting) and says little about the wife contribution to marvell(mainly marketing).
And we get the impression that marvell's success is mostly due to engineering(maybe because it's spectrum - a newspaper for engineers).
Reading a bit more about dei, i don't get some impression that she's a marketing wizard.

Hi, Sprite0022. We appreciate your posting comments, but we do not share your view about Weili Dai. Weili, together with Sehat Sutardja, CEO of Marvell, have built Marvell. They are a genuine team. There's a story on IEEE Spectrum that details their journey:
http://spectrum.ieee.org/semiconductors/design/sehat-sutardja-an-engineering-marvell/0
Hope you will have a chance to read it and change your opinion.

Design-lite can be afforded only by tier-1 system companies, this is due to the fact that Taiwan's Faraday marks up the IC turnkey cost by 60% (for over 40% gross margin), thus enabling companies like VeriSilicon to grab some market share.
For fast evolving markets like tablet, such design-lite scheme does not work. This can be seen from China's top 3 tablet AP vendors: Allwinner, Rockchip and AMLogic. Allwinner goes from almost zero to close to 50% market share in China in a year because it designs most of its IPs in-house and has a much better turn-key solution than competitors. If you outsource like Rockchip used to be, you lose the competitiveness and market share.
Still, design-lite is good for niche SoC markets where incumbents enjoy 90% gross margin (like certain video/image multimedia SoC).